Alternative Approaches to the Political Business Cycle
This paper reviews the theory and evidence concerning Political Business Cycles (PBC), which are based on the obvious facts of democratic life that voters care about the economy while politicians care about power. The first section provides an overview of different approaches to political cycles, describing five models that have been used in different contexts. The next two sections review major theoretical issues, with attention to the "microfoundations" of politico-economic systems, an exploration of the implications of ideological parties for political equilibria, and a formal analysis of a number of different PBC models. The empirical sections begin with an analysis of two important empirical questions in PCB models: whether voters are ultrarational and whether parties are ideological or opportunistic. The final section then examines historical and econometric evidence to determine the importance of political cycles in macroeconomic activity.
|Date of creation:||Oct 1989|
|Publication status:||Published in Brookings Papers on Economic Activity (1989), 2: 1-68|
|Contact details of provider:|| Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA|
Phone: (203) 432-3702
Fax: (203) 432-6167
Web page: http://cowles.yale.edu/
More information through EDIRC
|Order Information:|| Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- repec:cup:apsrev:v:64:y:1970:i:01:p:18-34_12 is not listed on IDEAS
- Leroy Laney & Thomas Willett, 1983. "Presidential politics, budget deficits, and monetary policy in the United States; 1960–1976," Public Choice, Springer, vol. 40(1), pages 53-69, January.
- Frey, Bruno S & Schneider, Friedrich, 1978. "An Empirical Study of Politico-Economic Interaction in the United States," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 174-183, May.
- Barro, Robert J. & Gordon, David B., 1983.
"Rules, discretion and reputation in a model of monetary policy,"
Journal of Monetary Economics,
Elsevier, vol. 12(1), pages 101-121.
- Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
- repec:cup:apsrev:v:71:y:1977:i:04:p:1467-1487_26 is not listed on IDEAS
- Fair, Ray C, 1978. "The Effect of Economic Events on Votes for President," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 159-173, May.
- Ray C. Fair, 1976. "The Effects of Economic Events on Votes for President," Cowles Foundation Discussion Papers 418, Cowles Foundation for Research in Economics, Yale University.
- MacRae, C Duncan, 1977. "A Political Model of the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 239-263, April.
- Bruno S. Frey, 1978. "Keynesian Thinking in Politico-Economic Models," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 1(1), pages 71-81, October.
- Susan Lepper, 1974. "Voting behavior and aggregate policy targets," Public Choice, Springer, vol. 18(1), pages 67-81, June.
- Frey, Bruno S, 1974. "The Politico-Economic System: A Simulation Model," Kyklos, Wiley Blackwell, vol. 27(2), pages 227-254.
- Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 1-16.
- Kenneth Rogoff & Anne Sibert, 1986. "Elections and Macroeconomic Policy Cycles," NBER Working Papers 1838, National Bureau of Economic Research, Inc.
- Rogoff, Kenneth, 1990. "Equilibrium Political Budget Cycles," American Economic Review, American Economic Association, vol. 80(1), pages 21-36, March.
- Kenneth Rogoff, 1987. "Equilibrium Political Budget Cycles," NBER Working Papers 2428, National Bureau of Economic Research, Inc.
- Frey, Bruno S & Schneider, Friedrich, 1978. "A Politico-Economic Model of the United Kingdom," Economic Journal, Royal Economic Society, vol. 88(350), pages 243-253, June.
- repec:cup:apsrev:v:83:y:1989:i:02:p:373-398_08 is not listed on IDEAS
- Rosenthal, Howard & Alesina, Alberto, 1989. "Partisan Cycles in Congressional Elections and the Macroeconomy," Scholarly Articles 4553031, Harvard University Department of Economics.
- Nathaniel Beck, 1982. "Does there exist a political business cycle: A Box-Tiao analysis," Public Choice, Springer, vol. 38(2), pages 205-209, January.
- Alberto Alesina & Howard Rosenthal, 1988. "Partisan Cycles in Congressional Elections and the Macroeconomy," NBER Working Papers 2706, National Bureau of Economic Research, Inc.
- Wittman, Donald, 1977. "Candidates with policy preferences: A dynamic model," Journal of Economic Theory, Elsevier, vol. 14(1), pages 180-189, February.
- William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:927. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Matthew C. Regan)
If references are entirely missing, you can add them using this form.